Working on economic fix

Bush, Dems expected to agree that stimulus plan needed

January 12, 2008|By Steven R. Weisman and David M. Herszenhorn, The New York Times

WASHINGTON -- The Bush administration and congressional leaders, increasingly concerned about a possible recession, are moving closer to agreeing that an economic stimulus package is needed soon, Washington officials said on Friday.

A Republican familiar with the administration's thinking said Bush would present ideas to stimulate the economy, most likely in the form of tax relief, in his State of the Union message Jan. 28.

Bush will not decide on the details until he returns from the Middle East next week.

The Associated Press reported that the White House is examining broad-based tax rebates comparable to the $300 to $600 checks sent to taxpayers in 2001, as well as bigger tax breaks for businesses that invest in new equipment.

Meanwhile, Democrats and Republicans on Capitol Hill are suggesting that they might be able to put aside longstanding partisan differences and work on a stimulus measure soon, lawmakers and congressional aides said on Friday.

In a fresh sign of the possibility of an agreement on a roughly $100 billion package of tax cuts and spending to spur the economy, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., wrote to Bush on Friday saying, "we want to work with you."

On Monday, Bush had acknowledged that Americans were "anxious about the economy" and said he was studying what actions to take.

Some Democrats say they could support tax relief focused on lower-income people, and perhaps even tax cuts for corporations, if the White House and the Republican congressional leadership accepted some spending increases such as extended jobless benefits or aid to states to help them avert spending cuts.

On Friday, Sen. Hillary Clinton of New York became the first presidential candidate to offer a relief package.

Her proposal includes $70 billion in spending for housing, heating subsidies and state aid, and $40 billion in tax rebates if conditions get worse.

Some lawmakers said calls from the campaign trail for limiting partisanship and changing the way Washington works were resonating on Capitol Hill, but that it would still not be easy for the Bush administration and Democrats to bury their ideological differences on a rescue package.